Sept/Oct 2008

The life and death of the Tough-Oakes mine

By
D. Zlotnikov

George Tough

There are many stories — both of success and failure — linked to the mining boom that engulfed Cobalt, Ontario, and the surrounding area early in the 20th century. But likely the best-known of them is that of Sir Harry Oakes and the Tough brothers and the Tough-Oakes mine. Despite becoming very successful and prosperous, Oakes’ fame comes not from his achievements as a gold miner but from the mystery of his death — the millionaire’s charred body was found in his Nassau home on July 8, 1943; his murderer was never found. But for Sir Harry Oakes, the millionaire’s journey began when he was merely Harry Oakes the prospector, staking claims with the four Tough brothers.

Most of the written record found today “deals with the Tough-Oakes story as a sidebar to the tale of Harry Oakes’ life and sensational murder,” wrote George Wallace Tough, the grandson and namesake of the youngest of the Tough brothers. Fortunately, Tough Jr. was able to find much more detailed records of the mine’s financial state, mostly in headlines from the Northern Miner. In these, the turbulent story of the mine is quite evident.

The beginning

Oakes and the Tough brothers arrived in the town of Swastika in early 1911. At that time, the brothers were hauling goods for the mining and exploration industry in Cobalt. As the exploration moved north, they moved with it and learned about the mining trade as they went.

Oakes, on the other hand, was an old hand at gold prospecting. By the time he arrived in Swastika, he had been to the Klondike, the Belgian Congo and even Australia. But, like most prospectors of that time, Oakes’ experience and efforts had not yielded the hoped-for riches. The brothers had worked with Oakes to get by, but were mainly biding their time until the claims were to open. On January 27, 1912, George and Tom Tough met with Oakes and set out to stake their first claims.

“It was 56 degrees below zero that night when we set off on snowshoes to travel the six miles by trail to the claims,” recalled George in a 1934 interview. “I think Oakes had on about five pairs of pants and we had a few pairs too.” In the dark of night, the partners staked three claims in Oakes’ name and two in Tom Tough’s. The Tough-Oakes mine was born.

The prospecting

The partners immediately began prospecting on the site and George was fortunate enough to find two narrow but rich gold-bearing veins shortly thereafter. The brothers wrote to Oakes, who had gone to Maine to try and sell the claims, on the basis of their location, for $1,200. After Oakes returned, tests showed spectacular values of over $1,200 per ton, at a gold price of $20 per ounce.
The Ontario Department of Mines agreed with the partners’ optimistic view, saying that “no other property in the camp” contained surface showings of such richness and size. This was particularly remarkable given that its extensive deposits had earned the area the name “Mile of Gold.”

Rich as they were, the veins were narrow and hard to follow, tended to dip into neighbouring claims and were often cut off by faulting. This dissuaded many an investor and the mine seemed doomed to financial troubles even before being built.

Nonetheless, the partners persevered and turned down offers to buy the claim, including one as high as $125,000. The first sign of respite was an investment by Clem Foster, whom the Tough brothers had worked with before. Foster was an engineer by trade, an experienced mining entrepreneur and, at the time, the mayor of Haileybury.

Due to the size of Foster’s investment and his expertise, when Tough-Oakes Gold Mines Limited was formed in 1913, Foster became the largest shareholder and the company president.

The beginning of the end

But the geological complexities of the deposit meant that it would take a greater investment before the mine returned a profit. Faced with a lack of interest from U.S. and Canadian investors, the partners turned to Foster once more. Foster was asked to go to London, England, to find buyers for a large number of the company’s shares.

There is no clear record of what transpired in London, but soon after, Foster found himself named as the defendant in a series of suits brought on by a company he was negotiating with, Kirkland Lake Proprietary Limited. While the suits were pending, the court forbade Foster from voting in shareholder meetings.

Back in Canada, the London fiasco drew ire from the shareholders, who felt that Foster had underpriced the shares and traded shares belonging to Harry Oakes’ relative. This caused another suit to be filed against Foster and a shareholders meeting to be called in January 1916. At that meeting, the shareholders voted to remove Foster as president and dismiss the company’s directors. Foster, his shares still frozen by the court, was unable to vote. The Tough brothers did not attend due to a court injunction and were dismissed from the board. Harry Oakes, joining the dissenting shareholders, was elected as the new president.

Despite Foster claiming that the meeting did not achieve quorum and was thus illegal, the Ontario Supreme Court upheld the dismissals and, in a March 1917 decision, confirmed that Foster and the Toughs no longer had any control over the company’s future.

The aftermath

Despite the lawsuits, Kirkland Lake Proprietary Ltd. eventually acquired a controlling interest in Tough-Oakes Mines Ltd. But the damage was already done and production at the mine remained sporadic. As the richer veins were exhausted and deeper mining required more investment, the company struggled with the financial burden. In the end, the company closed the mine, defaulted on its recently issued $250,000 in bonds and declared bankruptcy. Having produced nearly $3,000,000 worth of gold and silver, the first of the Mile of Gold mines was no more.

Both the Toughs and Harry Oakes continued staking claims while starting up the first mine. It was that second round of claims that were to become Oakes’ Lake Shore mine and bring Harry untold riches. As luck would have it, the Toughs sold the claims staked during the Tough-Oakes mine operations for $7,000. These were later sold back to Oakes for the enormous sum of $30,000 and 50,000 shares in the Lake Shore operation — shares that rose to over $60. Despite missing out on the big payout, the Toughs could not escape the prospecting bug. All four brothers continued working on various projects, bringing their children into the business. Moreover, none of them were murdered.